NZ dollar slips on weak Chinese data, may extend decline

NZ dollar slips on weak Chinese data, may extend
decline

By Paul McBeth

Sept. 15 (BusinessDesk) -
The New Zealand dollar fell after weak Chinese data dimmed
the outlook for the world's second-biggest economy as
traders awaited the US Federal Reserve meeting and local
figures on growth and the balance of payments.

The kiwi
slipped to 81.28 US cents at 5pm in Wellington from 81.58
cents at 8am and 81.51 cents on Friday in New York. The
trade-weighted index declined to 78.11 from 78.53 last
week.

Weaker than expected Chinese industrial output,
retail sales and fixed-asset investment eroded optimism the
world's second biggest economy is on the mend, sapping
investor appetite for nations such as New Zealand and
Australia which count China as a major trading partner. That
comes ahead of the US Federal Open Market Committee policy
review, which may heighten expectations for higher US
interest rates and firm up support for the
greenback.

"China is still responding to tightening from
way back, and will probably have to loosen a little bit
more," said Imre Speizer, market strategist at Westpac
Banking Corp in Auckland. "In the very short-term that will
be a negative for most commodity currencies, more for the
Aussie than the kiwi."

The kiwi will probably trade
between 79.60 US cents and 83.40 cents this week, according
to a BusinessDesk survey of 10 currency traders and
strategists. Five pick the local currency to decline, three
say it will probably remain relatively unchanged and two
expect a gain.

Westpac's Speizer said the local currency
will probably head towards 80.50 US cents this week with the
Fed review the biggest event, though the upcoming milk
auction on Fonterra Cooperative Group's GlobalDairyTrade
platform, New Zealand's second quarter gross domestic
product figures and the upcoming general election will also
weigh on the kiwi.

The kiwi rose to 90.30 Australian cents
at 5pm in Wellington from 90.16 cents on Friday in New York,
and declined to 87.18 yen from 87.48 yen. It was little
changed at 62.71 euro cents from 62.86 cents, and traded at
50.05 British pence from 50.10
pence.

The Wellington-based BusinessDesk team led by former Bloomberg Asian top editor Jonathan Underhill and Qantas Award-winning journalist and commentator Pattrick Smellie provides a daily news feed for a serious business audience.

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